Wall Street's Tesla bulls are in trouble

This is latest effort to craft a new plot twist for a company that has been fueled by its story.

It remains to be seen whether the move will bolster Tesla shares, which have been sliding in 2018.

After soaring toward $400 a share last year, Tesla's stock has taken a huge hit in 2018, down 10%.

Tesla's volatility is nothing new, but there's a chance that it's actually different this time. The 2017 surge was all about the Model 3, Tesla's mass-market vehicle, which has been struggling to achieve production goals. And by struggle, we mean missed them by a country mile.

Shares are now in the ballpark of $100 or more below some analyst's targets, and while Tesla could regain its momentum swiftly, next week's first-quarter earnings are expected to be extremely bad. Clearly, the stock slide is pricing that in, but the question then becomes, "Where does Tesla bottom out, for now?"

A level at $250 seems about right, although if the company slips to $200, we could be in look-out-below territory.

This means that Tesla bulls are in a pickle. Morgan Stanley's Adam Jonas, for example, has a target price of $376 and the equivalent of a "hold" rating on the stock. That target is pretty close to highest price Tesla achieved last year when it was rolling in positive news.

Now that the story has turned negative, Jonas (and other analysts with elevated target prices) are up against it. If they trim, they risk looking deluded, in the face of titanic ongoing losses. If they slash, they might as well throw in the towel and admit that Tesla snookered them.

The alternatives are to sit tight and hope for a Tesla rally in the future, on some sort of upbeat news or product announcement; or come up with a new subplot in the Tesla story.

A beautiful big data friendship

Hollis Johnson/Business Insider

Jonas seems to be doing both. In a research note published Friday, he looked at Tesla through the lens of CEO Elon Musk's other company, SpaceX, which hasn't yet gone public and has posted far more good news than Tesla in the past four months, with the successful Falcon Heavy launch.

The result is a mashup of several Jonas themes: big transportation data, shared mobility and self-driving cars, and broadband satellites.

"Shared and autonomous vehicles will produce extraordinary amounts of data," he wrote. "The need for a cybersecure network is clear. SpaceX enters the broadband market in 2019. Does Tesla present itself as a large captive customer for SpaceX? Does SpaceX help solidify an important technological moat for Tesla?"

Embedded in those questions is the notion that automakers will become, at some future point, data brokers. This prospect excites car executives, largely because they smell free money: they figure that owners will gladly give up up their data, leaving the auto companies at liberty to monetize it.

We need a new monopoly

A literal game changer.Bruno Vincent/Getty Images

Jonas' assumption is that as Tesla has shown no meaningful capability to convert its luxury electric-vehicle monopoly into profits - thereby vindicating its $40-billion-plus market cap - it needs some other source of outsize margins, one that it can control soups-to-nuts in order to take another crack at using monopoly power to reward investors.

This is where the idea that Tesla would be SpaceX "captive customer" is interesting. Why would Tesla actually pay SpaceX anything? Presumably, whatever SpaceX is selling, Tesla could obtain gratis. This would be a major competitive advantage.

Of course, it would also be a way to bake in a $100 or more of upside to Tesla's flagging shares - by morphing the Tesla story in a buzzy new direction. You'll recall that when the electric-car narrative was running out of juice a few years back and major automakers started to announce that they were bringing new EVs to market, Tesla added autonomous mobility to its story.

Dozens of EVs will be hitting the streets in the next few years, fighting for meager market share. That's a negative for Tesla, which has never really had to defend its huge slice of a small pie. On autonomy, Tesla isn't keeping pace. Both Waymo and General Motors' Cruise are on track to roll out self-driving ride-hailing services, while Tesla's Autopilot technology remains locked into an own-lease model.

Enter...data! Supercharged by the synergistic relationship between Tesla and SpaceX. That has to be worth something, right?

Whether that value is financially isn't important. It sustains the bull thesis. And with Tesla in a swoon, that's all that matters.